U.S. stocks plunge, wiping out July's gains
NEW YORK - For investors, there were few havens Thursday.
The stock market had its worst one-day drop since February, driven down by a confluence of worries, from weak company earnings to the looming end of stimulus from the Federal Reserve.
But it wasn't just stocks that suffered; oil fell to its lowest level since March, gold dropped, and even Treasury notes edged lower.
Stocks started the day lower after a dose of bad earnings news, and the losses accelerated throughout the day.
Whole Foods Market and Exxon Mobil were among companies that fell after reporting results or forecasts that disappointed investors.
The stock market has been on a bull run for more than five years, with the most recent leg of that surge pushing the Standard & Poor's 500 index to an all-time high a week ago. Investors are now getting concerned that stocks may have climbed too far and reflect too much optimism on the outlook for growth.
The S&P 500 dropped 39.40 points, or 2 percent, to 1,930.67, its biggest loss since April 10. The drop pushed the index to its first monthly loss since January.
The Dow Jones industrial average plunged 317.06 points, or 1.88 percent, to 16,563.30. The Nasdaq composite fell 93.13 points, or 2.09 percent, to 4,369.77.
Exxon Mobil stock fell $4.31, or 4.2 percent, to $98.94 after the energy company said oil and gas production slipped 6 percent, disappointing analysts. The decline was driven by the expiration of rights to a field in Abu Dhabi and natural field declines.
Investors are also concerned about the outlook for growth in Europe as tensions escalate between the European Union and Russia after the downing of a passenger plane over Ukraine. The European Union on Thursday disclosed the details of broad economic sanctions against Russia.
The main driver behind Thursday's sell-off was a reassessment of the outlook for interest rates in the U.S., said Paul Zemsky, chief investment officer of Multi-Asset Strategies and Solutions at Voya Investment Management.
Fed policymakers said the central bank would make further cuts to its monthly bond purchases, a program that was intended to keep long-term interest rates low and encourage borrowing and spending. Policymakers are also becoming more optimistic about the outlook for the U.S. economy after growth expanded by a better-than-expected 4 percent in the second quarter.
Gold fell $13.60, or 1.1 percent, to $1,281.30 an ounce. Silver fell 19 cents, or 0.9 percent, to $20.41 an ounce.
Benchmark U.S. crude fell $2.10 to close at $98.17 a barrel in New York, its lowest level since March 17. Oil's high for the year was $107.26, set June 20; its low was $91.66, set Jan. 9.
Brent crude, a benchmark for international oils used by many U.S. refineries, fell 49 cents Thursday to close at $106.02 in London.
Prices for U.S. government bonds were little changed. The yield on the 10-year Treasury note edged up to 2.57 percent from 2.56 percent Wednesday.